Under pressure

Yesterday's currency recap

UK political tensions weighed on GBP, with the currency hitting a fresh 2½-year low against the EUR amid speculation Health Secretary Wes Streeting might challenge PM Keir Starmer – despite his dismissal of the claims. Analysts noted that such uncertainty is negative for GBP and gilts, leaving the currency near the bottom of the G10 FX leaderboard ahead of the likely gloomy November 26 Autumn Budget.

The US government shutdown is now over and Trump signed legislation and lawmakers passed a temporary funding bill.

Today's GBP rates

What we think

UK GDP numbers for Q3 came in lower than expected at 0.1% versus the expected growth of 0.2% adding to the growing list of reasons for markets to be negative on GBP.

Tuesday’s weaker-than-expected UK jobs data reinforced expectations for a Bank of England rate cut, while political uncertainty, fuelled by leadership speculation, adds further downside risk. Markets are also looking ahead to next week’s CPI print, which could set the tone for the BoE’s near-term policy path. Overall, GBP is likely to remain vulnerable, trading cautiously with a bias to the downside into the budget and key data releases.

Still no confirmation on when and what data will be released stateside following the end of the shutdown, but we are seeing a weaker USD this morning with note on EURUSD punching through the September downtrend.

AUD got a boost after job numbers came in stronger than expected seeing markets ease back rate cut bets by the RBA. GBPAUD now sits at the March 2025 lows.

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